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Why Is Hain Celestial (HAIN) Up 14.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Hain Celestial (HAIN - Free Report) . Shares have added about 14.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hain Celestial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hain Celestial Q1 Earnings Top Estimates, Sales Up Y/Y
Hain Celestial reported first-quarter fiscal 2021 results, with the top and the bottom line exceeding the Zacks Consensus Estimate as well as improving year over year. Results were fueled by strong performance across the North America and the International units.
Management is particularly impressed with the strong margin growth witnessed in the quarter. Moreover, management believes that despite the challenges surrounding the coronavirus pandemic, the company is well positioned to keep growing. In fact it expects sustained growth in margins in the second quarter as well as in fiscal 2021.
Quarter in Detail
Hain Celestial posted adjusted earnings of 27 cents a share, which surpassed the Zacks Consensus Estimate of 18 cents. This marked the company’s fifth consecutive beat. The bottom-line also improved significantly from 8 cents reported in the prior-year quarter. Higher sales and margins seem to have fueled the bottom line.
Net sales were $498.6 million, which climbed 3% on reported and 1% on a constant-currency (cc) basis. Top line surpassed the consensus mark of $493.6 million. Higher sales in the North America and the International segments aided the top line. On adjusting for currency fluctuations, divestitures and discontinued brands, net sales advanced 5%.
Adjusted gross margin expanded 326 basis points (bps) to 24.1%, Adjusted operating income was $38.8 million in the quarter, which more than doubled from $16.9 million in the year-ago quarter. Adjusted EBITDA increased 71% to $54.9 million, while adjusted EBITDA margin expanded 435 bps to 11%. The expansion was fueled by a higher gross margin.
Segment Results
Net sales in the North America segment increased 3% year over year to $280.7 million. On adjusting for currency movements, divestitures and discontinued brands, net sales rose 10%. Segment adjusted operating income rose a solid 83% to $34.7 million. The segments adjusted EBITDA amounted to $39.1 million, rising nearly 63%. Moreover adjusted EBITDA margin (as a percentage of sales and at cc) expanded 510 bps to reach 13.9%.
International net sales advanced 4% year over year to $218 million. On adjusting for foreign currency fluctuations, divestitures and discontinued brands, net sales declined 1% year on year. Further, segment adjusted operating income surged 51% to $17.3 million. Adjusted EBITDA amounted to $26.7 million, rising nearly 35%. Adjusted EBITDA margin (as a percentage of sales and at cc) expanded 280 bps to reach 12.2%.
Other Financials
The company ended the quarter with cash and cash equivalents of $27.5 million, long-term debt (excluding current portion) of $289 million and total shareholders’ equity of $1,436.6 million.
Cash provided by operating activities from continuing operations were $40.7 million for the first quarter. The company’s operating free cash flow from continuing operations was $28.5 million.
During the quarter, management bought back 1.3 million shares at an average cost of $32.81 per share. The company had shares worth $147.8 million remaining under its buyback authorization as of Sep 30, 2020.
Outlook
Due to uncertainty surrounding the COVID-19 pandemic, management refrained from providing specific top- and bottom-line guidance for fiscal 2021. However, it expects gross margin to expand. Also it expects strong double digit growth in adjusted EBITDA along with expansion in adjusted EBITDA margins.
For the second quarter of fiscal 2021, management anticipates net sales to grow in mid-single digit, at cc after excluding divestitures and discontinued brands. Further, it expects gross margin to rise considerably in the quarter and anticipates higher adjusted EBITDA.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 12.58% due to these changes.
VGM Scores
At this time, Hain Celestial has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Hain Celestial has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Hain Celestial (HAIN) Up 14.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Hain Celestial (HAIN - Free Report) . Shares have added about 14.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hain Celestial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hain Celestial Q1 Earnings Top Estimates, Sales Up Y/Y
Hain Celestial reported first-quarter fiscal 2021 results, with the top and the bottom line exceeding the Zacks Consensus Estimate as well as improving year over year. Results were fueled by strong performance across the North America and the International units.
Management is particularly impressed with the strong margin growth witnessed in the quarter. Moreover, management believes that despite the challenges surrounding the coronavirus pandemic, the company is well positioned to keep growing. In fact it expects sustained growth in margins in the second quarter as well as in fiscal 2021.
Quarter in Detail
Hain Celestial posted adjusted earnings of 27 cents a share, which surpassed the Zacks Consensus Estimate of 18 cents. This marked the company’s fifth consecutive beat. The bottom-line also improved significantly from 8 cents reported in the prior-year quarter. Higher sales and margins seem to have fueled the bottom line.
Net sales were $498.6 million, which climbed 3% on reported and 1% on a constant-currency (cc) basis. Top line surpassed the consensus mark of $493.6 million. Higher sales in the North America and the International segments aided the top line. On adjusting for currency fluctuations, divestitures and discontinued brands, net sales advanced 5%.
Adjusted gross margin expanded 326 basis points (bps) to 24.1%, Adjusted operating income was $38.8 million in the quarter, which more than doubled from $16.9 million in the year-ago quarter. Adjusted EBITDA increased 71% to $54.9 million, while adjusted EBITDA margin expanded 435 bps to 11%. The expansion was fueled by a higher gross margin.
Segment Results
Net sales in the North America segment increased 3% year over year to $280.7 million. On adjusting for currency movements, divestitures and discontinued brands, net sales rose 10%. Segment adjusted operating income rose a solid 83% to $34.7 million. The segments adjusted EBITDA amounted to $39.1 million, rising nearly 63%. Moreover adjusted EBITDA margin (as a percentage of sales and at cc) expanded 510 bps to reach 13.9%.
International net sales advanced 4% year over year to $218 million. On adjusting for foreign currency fluctuations, divestitures and discontinued brands, net sales declined 1% year on year. Further, segment adjusted operating income surged 51% to $17.3 million. Adjusted EBITDA amounted to $26.7 million, rising nearly 35%. Adjusted EBITDA margin (as a percentage of sales and at cc) expanded 280 bps to reach 12.2%.
Other Financials
The company ended the quarter with cash and cash equivalents of $27.5 million, long-term debt (excluding current portion) of $289 million and total shareholders’ equity of $1,436.6 million.
Cash provided by operating activities from continuing operations were $40.7 million for the first quarter. The company’s operating free cash flow from continuing operations was $28.5 million.
During the quarter, management bought back 1.3 million shares at an average cost of $32.81 per share. The company had shares worth $147.8 million remaining under its buyback authorization as of Sep 30, 2020.
Outlook
Due to uncertainty surrounding the COVID-19 pandemic, management refrained from providing specific top- and bottom-line guidance for fiscal 2021. However, it expects gross margin to expand. Also it expects strong double digit growth in adjusted EBITDA along with expansion in adjusted EBITDA margins.
For the second quarter of fiscal 2021, management anticipates net sales to grow in mid-single digit, at cc after excluding divestitures and discontinued brands. Further, it expects gross margin to rise considerably in the quarter and anticipates higher adjusted EBITDA.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 12.58% due to these changes.
VGM Scores
At this time, Hain Celestial has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Hain Celestial has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.